Even though the sale of IBM's chip division would make big waves in the industry, a deal still might make sense.
Increasingly the big data centers of Web giants such as Amazon, Google and others are handling the tough computing jobs using off-the-shelf Intel x86 systems. Indeed, Amazon won a $600 million deal from IBM to deliver computing services for the US Central Intelligence Agency.
The cost and complexity of making chips is rising rapidly, increasingly driving chip vendors to a fabless model. Industry watchers predict the end of CMOS scaling altogether at the 5-nm node in 10-15 years.
IBM once had a significant business making chips for other companies, helping it make a return on the division. But it lost its lucrative design wins in Nintendo, Playstation and Xbox videogame consoles, mainly to Intel's x86 chips.
Big Blue's Cell processor -- an early multicore chip co-developed with Sony and Toshiba -- never found significant design wins beyond Sony's Playstation 3. IBM used the chip in the Roadrunner supercomputer, the first to break the petaflops barrier. But despite attempts to open up the technology for use in everything from HDTVs to servers, it failed to gain traction.
IBM's PowerPC processor never got into mainstream PCs. It did establish a significant beachhead in communications processors. But now Freescale, LSI, Texas Instruments, and others are increasingly turning to ARM cores for their embedded SoCs. Indeed, even IBM licensed 32-bit ARM cores recently for ASIC customers.
A decade ago, IBM's chip customers included Cisco Systems which used at least two big ASICs in its high-end router. These days rumors fly that Cisco is making its latest router chips in Intel's 22-nm FinFET process.
Big Blue's still relatively new chief executive, Virginia Rometty, is no doubt weighing all these factors as she calls in the consultants to explore the alternatives. She may find as early as this year a fabless future for IBM.
It would not be surprising if IBM continues to devote significant engineering efforts to designing processors and ASICs for itself and third parties – even if someone else makes them.
The company has just started efforts to explore a home for its processor architecture in massive data centers with the Open Power Consortium launched last year. IBM's latest Power 8 processors are just emerging from the fab, and there are sure to be Power 9 and 10 teams hard at work.
Someday Globalfoundries, Samsung, or UMC might be making IBM's chips. That would have big implications for the industry. But IBM's work on and influence in semiconductors likely will be felt for many years to come.
— Rick Merritt, Silicon Valley Bureau Chief, EE Times